Directors call for tax reform

The surge of company directors and executives calling for substantial tax reform grew yesterday in reaction to the federal government reneging on its promise to cut company tax.

The calls came as
Rio Tinto
chief executive
Tom Albanese
mocked the possibility that the government could accurately predict its mining tax take.

The government has racheted down its expected revenue by nearly $1 billion, to $9.7 billion, due to currency fluctuations and softer commodity prices.

Mr Albanese said the main driver of the tax would be revenues, because it is designed to capture higher-than-expected profits. That relied on commodity prices and costs, which in turn depended on factors such as diesel prices and currency levels.

“If we’re not good at something, it is predicting prices," he said.

“We’re in the mining business because we would rather take the price that’s out there in the market. If I could tell you the future price, I would be sitting on a beach with a laptop computer right now," he said. “And you really do have to predict that future price to predict what that future tax would be."

National Australia Bank
chief executive
Cameron Clyne
bucked the general business sentiment on the lost company tax cut, saying he hadn’t focused too much on it. “We didn’t have it as yet so we haven’t lost anything that was real. Obviously, it would be concerning to business but I haven’t focused too much on it."

Attending the Australian Institute of Company Directors’ conference in Darwin yesterday, a number of executives joined the widespread call for tax reform.

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Company Profile

Director at
Woodside
Melinda Cilento
said business was looking for a “consistent and credible commitment to tax reform". “Tax reform which is about improving the growth and investment opportunities in this country, that is where the disappointment stems from," she told The Australian Financial Review.

The leading female director expressed frustration over changes to the living away from home allowance “which will make it harder for people to attract talent".

“Again, where does this fit in to the broader tax objectives and the objective we have to attract the best and brightest to this country when we are facing significant skill shortages?"

Chairman of
Woolworths
and director of
Qantas
James Strong
said that while there was merit in major reviews such as the Henry tax review and Australia in the Asian Century, business wanted to see more results flow from such comprehensive reviews.

“I think generally there has been too much of a tendency to commission reports into things without at least an initial thought about what will we do about this or what will we be able to do.

“In the end, if nothing flows from all these sorts of things then the credibility is obviously diminished," Mr Strong said.

Director of
Sundance Resources
and
Aurora Oil & Gas
,
Fiona Harris
agreed. “The track record [of this government] is not good going right back to the personal liability for corporate-fault type study, going back to the remuneration reports and the various bodies that have had a look at that."

But assistant treasurer
Bill Shorten
said the business world needed to understand that the budgetary measures to help to workers and consumers would have positive flow-on effects to business.

“Please understand the consumers and the workers in your businesses and your factories and your construction sites, they have got to make ends meet, they’ve got bills to pay." He said business groups should blame the Coalition for the scrapped company tax cuts.

“I would give unhappy people in the ranks of business the phone number of the Liberal party of Australia because you can’t pass a law without a majority of votes."